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Lower prices, sales hurt Lundin earnings

Keywords: Tags  Lundin Mining, nickel, copper, lead, earnings report, Eagle Mine, Neves-Corvo Mine, Aguablanca Tenke Fungurume

NEW YORK — Lundin Mining Corp. said copper, nickel and lead production "exceeded expectations" in the first quarter.

However, the Toronto-based company’s net income plunged 73.5 percent in the three months ended March 31 compared with the same period a year earlier on sales that fell 20.4 percent, which it blamed on "lower realized metal prices and lower sales volumes."

Lundin is optimistic about operational performance, however, noting "higher throughput" at its Neves-Corvo Mine in Portugal and its Aguablanca facility in Spain, as well as characterizing its Tenke Fungurume copper operation in the Democratic Republic of Congo as continuing "to perform well."

"During the first quarter, production at our operations was generally in line with expectations," president and chief executive officer Paul Conibear said in a statement accompanying the company’s earnings report April 29. "However, unit costs in some areas were higher than our annual average cost guidance. Mine performance improved as the quarter advanced and we maintain our annual production and cost guidance."

Meanwhile the Eagle nickel-copper project in Michigan was 79 percent completed as of March 31, with all major equipment delivered and "in an advanced stage of installation," and the mine is expected to start production this year. Lundin said the project’s capital costs are on budget and expected to "come in at the original forecast of $400 million from the date of acquisition."

The Eagle Mine facility has already started some commissioning, with mill commissioning expected to start in the third quarter, Lundin said. The mine is on track to ship its "first saleable copper and nickel concentrates in the fourth quarter of 2014," with ore processing and concentrate production "expected to reach full design rates in the second quarter of 2015."

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